A recently released survey suggests Chinese manufacturing contracted in January for the first time in six months, putting a damper on the prospects for the world's second largest economy in the new year.

The Purchasing Manager's Index (PMI), released Wednesday by Britain's HSBC, fell to 49.6 in January. That is down from December's reading of 50.5 and is the lowest mark since August.

The PMI is a closely watched indicator of the health of China's economy. Any reading beneath 50 signals contraction for China's crucial manufacturing industry.